The properties are located approximately 30 kilometres (direct flight) south west of the town of Campbellton in the Province of New Brunswick, Canada (the “Properties”).
Pursuant to the Option Agreement, X-Terra may acquire a 100% undivided ownership interest in the Properties over a three-year period by making the following payments and incurring mining exploration expenditures as follows:
- by making cash payments to NBGold in the aggregate amount of $500,000, a $100,000 of which is payable on the initial payment date, which is expected to occur on or before December 15, 2018 (the “Closing Date”);
- by issuing an aggregate of 31,500,000 common shares of X-Terra (the “Shares”) to the Optionors, 4,000,000 of which will be issued on the Closing Date and the balance will be issuable over a period of 36 months from the signature date of the Option Agreement. 2,000,000 of these Shares will be issued to Mr. Tim Lavoie and the remaining Shares will be issued directly to NBGold shareholders;
- by issuing an aggregate of 10,000,000 common share purchase warrants of X-Terra (the “Warrants”) to NBGold shareholders, of which 2,000,000 Warrants exercisable at price of $0.15 per share for a period of 18 months will be issued on the Closing Date. The balance of Warrants will be issuable over a period of 36 months from the signature date of the Option Agreement (exercisable over 12 months upon issuance, except for the last tranche of 4,000,000 Warrants which will be exercisable over a five years period from their issuance date, all at a price per share equal to the greater of (i) $0.125 and (ii) the Market Price (as such term is defined in Policy 1.1 of the TSX Venture Exchange) at the time of issuance). Each warrant will entitle the holder thereof to acquire one common shares of X-Terra; and by incurring mining exploration expenditures in an aggregate amount of $5,750,000 over a period of 36 months on the Properties.
Upon completing all of the payments mentioned above, X-Terra will have a 100% ownership interest in the Properties and the Properties will be subject to a 2% net smelter return royalty in favor of the Optionors.
X-Terra may, at any time, purchase 50% of the net smelter return royalty from the Optionors for $10 million. Please refer to X-Terra’s press release dated September 25, 2018 for more details on the Properties and the Option.
X-Terra also announces that the TSX Venture Exchange conditionally approved the transaction contemplated by the Option Agreement, subject only to compliance with standard requirements of the TSX Venture Exchange and upon the closing of an equity private placement by X-Terra for a minimum amount of $1.5 million.
Any failure by X-Terra to comply with the standard requirements of the TSX Venture Exchange and completing the foregoing equity financing would result in the Option Agreement being terminated.
Source: Company Press Release
